Fraud In Conveyancing Transactions
Property fraud is on the increase, it commonly occurs when buying or selling a property but more increasingly a property can be “stolen” from underneath you, especially if you do not live in it.
Things to look out for when buying property include asking the occupiers of the property if they own it or let it under a legal tenancy agreement. Solicitors in the transaction are under a duty to check the identity of their client, but in this digital age, a lot of conveyancing work is carried out remotely where clients are not met face to face, there is a danger fraudulent ID paperwork could be submitted. During a property sale, always try a meet with the buyer and never hand over the keys, or let your Estate Agents do so, until your Solicitor has received all the sale proceeds in his account.
Unfortunately, fraudsters can intercept emails between clients and the conveyancers, changing bank account details, so when you transfer funds it could be disappearing into the fraudsters account. Bear in mind, solicitors rarely change banks accounts and are extremely unlikely to email you to tell you their bank account have changed and supply new account numbers. If you receive such an email, call the office on a number known to you, to check this is the case. Lots of solicitors don’t email out their bank details at all now.
There is an increased risk of fraud when:
• the property is empty or has been purchased-to-let
• the owner is spending time abroad or is absent
• the owner is infirm or in a nursing or care home
• a relationship breaks down between the property owners/dwellers
• the property has no mortgage
Organised criminal groups have been targeting empty properties in the UK to apply for loans, duping mortgage providers and causing further distress to members of the public.
Criminal networks are identifying empty properties using names on the published obituaries and carrying out further research on the Land Registry. Once a suitable property has been discovered the criminal group then organise for fake documentation to be produced, registering on the electoral role and with utility companies. They meticulously work through the legal hurdles until the finances are released by the unsuspecting organisation. The rights to the property actually belong to a completely innocent party who have no idea the crime has taken place until a much later point.
See the details of this case which highlight conveyancing fraud. Luckily for the real owner, the Land Registry spotted the fraud and would not register the transfer of title but it’s not such good news for the buyer!
We at Tollers take our due diligence very seriously and we do all we can to minimise the possibility of conveyancing fraud. Clients can help in the ways suggested in this article and bring to our attention anything that does not seem right.
Protect yourself against property fraud
- Be very wary of mail solicitations claiming great returns, no matter how good they look. Check out the company first. For example, does it have a legitimate street address and landline number? Look it up on the internet and check for reviews.
- Always check and verify information you receive with your solicitor, this doubles the chances of catching out a fraudulent seller/buyer
- Sign up to the Land Registry Property Alert Service for free, and they will contact you if they see activity at Land Registry regarding your property. You can register a “restriction” on your title deeds which states that nothing can be registered on the title until a solicitor certifies that the application was made by you.
If you have been affected by conveyancing fraud or any other fraud, report it to Action Fraud by calling 0300 123 2040, or visiting www.actionfraud.police.uk